Morning Briefing : 08-Feb-2010 - 0338 GMT


GOOD MORNING!


EQUITIES
The US equities ended slightly lower last week. The Dow ended half a percentage lower after oscillating 480 points between the High and Low last week. There's next pertinent Support near 9600 on the Dow which is likely to hold this week. The retail sales data which is due on Thursday would determine whether this Support holds going forward.

The Asian indices are trading lower today as well after falling last week. The Nikkei (10007.98) is trading lower by half a percent. The Shanghai (2932.56) and the Hang Seng (19579.29) are also trading lower today. The Sensex (15915.65) which had closed 2.7% lower last week may open lower today as well on cues from other Asian markets.


COMMODITIES
Crude (71.94) continued its fall on Friday and closed lower for the week at 71.19 following the strong dollar. Technically speaking, last weekly close below the Bull Channel and Thursday's (04-Feb-10) sharp fall with strong volumes ( the fifth highest on NYMEX) would retain the downside pressure. Support is seen at 71, a break below which might increase the chances of further dip towards 67.50. To see the Crude graph click on the following link:
http://www.kshitij.com/graphgallery/nymexcrudecandle.shtml#candle

Gold (1068.90) broke and closed below the Support at 1060 on Friday. Though it has bounced back from Firday's low of 1044.50, stronger dollar and Resistance in 1080-1100 region is expected to keep the price pressured on the downside. While below 1100, there are more chances of a dip towards 1030-20 in the coming days. To see the Gold graph click on the following link:
http://www.kshitij.com/graphgallery/goldcandle.shtml#candle


CURRENCIES
Last week's trends continuing, with no improvement in "risk appetite". The Euro (1.3635) has dipped after Friday's close near 1.3680. Sentiment remains weak in the near term, on European deficit situation. Dollar-Yen (89.27) continues to be ranged between 88.50-90.50 for the while, although there is a danger of a dip towards 88-87 in the coming days. The Euro-Yen Cross (121.70) is vulnerable to a fall towards 118 in the medium term, on Euro weakness.

The Aussie (0.8655) had bounced off the 200-day Moving average last week, but is vulnerable to a fall towards 0.84-83. The Pound (1.56) has only a weak Support near the current level and is looking weak overall. Dollar-Swiss (1.0760) may have some Resistance near 1.0825 for a couple of days, but the overall trend is well Dollar-positive.

Asian currencies have also weakened against the US Dollar. The USD-KRW trades high near 1171.70 and has chances of rising further towards 1186. USD-SGD (1.4210) is in a strong uptrend now and should be able to attract buying on dips in the days ahead. Dollar-Rupee had closed at 46.73 las week. The 1-week NDFs have traded near 46.76/81 this morning. The sentiment is changing from pro-Rupee to pro-Dollar.


INTEREST RATES
3M USD LIBOR was unchanged at 0.25%. The US Treasury yields have dipped last week. The 2Y and 10Y benchmark yields have fallen 4 and 3 bps last week to quote at 0.76% and 3.58% respectively.

Last week saw the RBA, BOE and ECB keep their key interest rates unchanged.


DATA TODAY
No major data release today.


FRIDAY'S DATA
Dec CA Labour Force
...Actual 43K...Previous -2.6K

Jan US NFP
...Actual 20K...Previous -150K
http://www.kshitij.com/fundamentals/funcharts/usnfp.shtml